Canadian luxury home sales continue to defy expectations

High-end home sales are thriving in many of Canada’s major markets despite a general slowdown in the housing sector overall, according to a report from real-estate broker firm Re/Max.

In a report released Wednesday, Re/Max said sales of luxury homes have “surged” this year in most of Canada’s major metropolitan areas. This comes a day after the Canadian Real Estate Association said listed home sales were down 4.4% overall in April from March on a seasonally adjusted basis, and 14.7% lower on an unadjusted basis from a year earlier.

But even that report said the average price of transactions was up eight per cent from a year ago, driven largely by - as we all know - multi million-dollar transactions in the Vancouver area.

Re/Max said sales of homes worth $2-million or more in the Vancouver region more than doubled in the first four months of this year to 747 from 343 a year earlier.

“I think a lot of the high-end buyers feel the confidence is back” said Michael Polzler, an executive vice-president with Re/Max. “They have confidence in the economy. They have confidence in the stock market, although it has had its bumps. . . . And businesses are doing well; small businesses are generally doing well.”

Mr. Polzler said a significant portion of the market for high-end homes is made up of business owners.

Foreign investment was said to be a big part of Vancouver’s thriving market for luxury homes, but Re/Max said locals were driving the market in most other regions.

In Ottawa, transactions involving homes sold for $750,000 or more were up 59% to 100 so far this year; there were 51% more sales at 145 in Calgary of homes sold for $1-million or more; and Winnipeg saw a 24% rise as 93 homes were sold for at least $500,000.

Luxury price points are picked by Re/Max’s local agents to reflect the top two to five per cent in terms of value for each given market.

There were also gains seen in markets such as Toronto, Hamilton and Halifax, but declines in Edmonton, Regina, Victoria and London, Ont.

Mr. Polzler said the luxury-home market is a relatively small part of the overall housing industry, and something that’s generally left for a handful of agents to specialize in.

“It’s certainly a segment we take very seriously, but the majority (of business) is in your bread-and-butter three-bedroom family homes,” he said. “There’s a lot less volume (in luxury homes). There’s really only so many deals.”

Source: Derek Abma, Financial Post

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